Velveeta Shortage Grips Nation

Using a “Shortage” to Drive Demand

Adding to the misery of the recent polar vortex that dropped temperatures into sub-zero misery, the country was struck this week by news of a possible shortage of Kraft Velveeta.  A common base ingredient in many popular chip and dip combinations, a Velveeta shortage could have significant repercussions that impact the enjoyment of the football playoff season. As the college football bowl season merged with the first round of the NFL playoffs, use of the popular chip dip ingredient apparently increased, causing the expected shortage for upcoming weekend gatherings.

Velveeta Cheese
Brick of Cheese


Clever Marketing Ploy?
Kraft Foods spokesperson Jody Moore said in an email release that the shortages were expected to be ‘temporary.’ Could this temporary shortage be driven – at least in part – by the belief that customers need to compete for a scarce product? As increased competition – either real or not – generates exposure and visibility, it does at least seem possible that the ‘shortage’ is being used for promotional purposes.

Capacity Planning
Most organizations plan to have sufficient product in place to meet periods of high demand. Failing to meet demand is one sure way to lose customers. As Velveeta is a product with a long shelf life, it would seem possible for Kraft to ramp up production to meet the additional demand driven by the multitude of football parties and events surrounding the end of the college season and the NFL playoffs.

Of course one of the consumer responses to a shortage is to conserve. High gas prices push drivers to be conservative with extra trips to avoid buying more fuel.  One social media commenter on Google+ stated that he was saving his last brick for the Super Bowl. Inspiring consumers to hang onto product instead of consuming more is probably not what Kraft marketers intended.

Social Media Activity
Creating attention through Twitter or other social media networks is a great way to keep the company brand in the forefront of consumer minds and to inspire short term consumption. Velveeta related hashtags show a great deal of Twitter activity and Facebook is taking place. One reader even suggested postponing the Super Bowl until the shortage could be alleviated.

Last year’s Oreo Cookie Super Bowl outreach was considered one of the more creative social media responses to the light failure at the big game.  News about the Velveeta shortage seems to be this year’s winner thus far in using major events to attract product visibility and to inspire sales.

So keep an eye on your grocery store shelves to see how this all works out. And if there really does turn out to be a shortage, I am hanging onto my last brick of Velveeta and will sell to the highest bidder.

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